China
Cambodia holds China close despite coronavirus
Authors: Christopher Primiano, KIMEP University and Sovinda Po, Griffith University
The MS Westerdam cruise ship — with 1455 passengers and 802 crew — was refused entry at five successive ports in Thailand, Taiwan, Japan, the Philippines and Guam for fears its passengers were infected with the coronavirus after departing its stop in Hong Kong at the start of the outbreak. That changed on 13 February when Cambodian Prime Minister Hun Sen welcomed the cruise ship to dock in Sihanoukville. Hun Sen’s handling of this case demonstrates Cambodia’s unique approach to managing relations with China.
Cambodia is a stalwart supporter of China, a country with which it enjoys strong economic and strategic relations. In contrast to other Southeast Asian states that want to balance security relations with the United States and economic ties with China, Cambodia is solidly in the China camp. Facing domestic political challenges and economic threats of sanctions by the likes of the European Union, economic and political engagement with China helps maintain Hun Sen’s grip on power and holds off the possibility of regime collapse.
Chinese economic investment enables the Cambodian Prime Minister to fund the patronage network that keeps him in power. This explains why Hun Sen travelled to China during the coronavirus outbreak and handled the cruise ship situation as he did. He predicted the Chinese government would not look kindly on countries that turned their backs on China by cutting off flights and contact during the coronavirus crisis.
On Valentine’s Day, Hun Sen greeted the disembarking MS Westerdam passengers with flowers and Cambodian scarves. The passengers were allowed to simply walk off the ship without any masks and go where they wished despite not having been properly medically screened. To demonstrate his lack of concern about the ship, Hun Sen did not wear a mask and his security forces had those wearing masks removed.
While the ship carried mostly Westerners, its association with the China-originated coronavirus is significant in this case. Hun Sen wanted to contrast Cambodia’s response with other Southeast Asian states that turned away the cruise ship. By welcoming it to dock in Cambodia, Hun Sen opted to show that he’s doing all he can during China’s time of need. This was to placate China, advance bilateral ties and safeguard the flow of economic investment.
Hun Sen stated that ‘evacuating [Cambodian students in Wuhan] would probably bring an end to opportunities for Cambodians to study there. China would stop offering scholarships’. This is a clear illustration of how he and the Cambodian government want to be viewed by Chinese President Xi Jinping as a staunch supporter of the Cambodia–China ‘friendship’ during this time of crisis.
The Chinese government has been pushing back on countries imposing travel bans on those coming from mainland China. In contrast, Hun Sen flew to Beijing — making him the first foreign leader to travel to China during this coronavirus outbreak. Instead of assisting Cambodian citizens in leaving China, Hun Sen wants them to stay and assist in combating the coronavirus.
While in China, Hun Sen stated ‘what is more terrible than the epidemic is the panic itself’. Flights are also continuing between China and Cambodia. Hun Sen’s visit and words of support have been warmly welcomed by the Chinese President — demonstrated by Xi’s announcement that ‘the Cambodian people stand with the Chinese people at this special moment’.
Hun Sen reportedly wanted to visit Wuhan to personally tell Cambodian students to remain there, further advancing Cambodia’s ties with China in his eyes. But the Chinese government turned down his request to drop in, with China’s Foreign Ministry spokesperson stating the city is too busy dealing with the outbreak situation.
Hun Sen’s handling of the docking of the MS Westerdam and the coronavirus crisis more broadly demonstrates his staunch alignment with China. The Cambodian government’s support for China stands in stark contrast to how other governments with relatively close ties with China, such as Russia and North Korea, have reacted to the situation. It implies that Hun Sen’s pro-China political and diplomatic positioning is set to continue on an upward soaring path.
Christopher Primiano is Assistant Professor at KIMEP University, Almaty.
Sovinda Po is a PhD candidate at the School of Government and International Relations, Griffith University.
China
China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
China’s Ministry of Commerce announced new policy measures on April 19, 2023, to encourage foreign investment in the technology sector. The measures include facilitating bond issuance, improving the investment environment, and simplifying procedures for foreign institutions to access the Chinese market.
On April 19, 2023, China’s Ministry of Commerce (MOFCOM) along with nine other departments announced a new set of policy measures (hereinafter, “new measures”) aimed at encouraging foreign investment in its technology sector.
Among the new measures, China intends to facilitate the issuance of RMB bonds by eligible overseas institutions and encourage both domestic and foreign-invested tech companies to raise funds through bond issuance.
In this article, we offer an overview of the new measures and their broader significance in fostering international investment and driving innovation-driven growth, underscoring China’s efforts to instill confidence among foreign investors.
The new measures contain a total of sixteen points aimed at facilitating foreign investment in China’s technology sector and improving the overall investment environment.
Divided into four main chapters, the new measures address key aspects including:
Firstly, China aims to expedite the approval process for QFII and RQFII, ensuring efficient access to the Chinese market. Moreover, the government promises to simplify procedures, facilitating operational activities and fund management for foreign institutions.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
Q1 2024 Brief on Transfer Pricing in Asia
Indonesia’s Ministry of Finance released Regulation No. 172 of 2023 on transfer pricing, consolidating various guidelines. The Directorate General of Taxes focuses on compliance, expanded arm’s length principle, and substance checks. Singapore’s Budget 2024 addresses economic challenges, operational costs, and sustainability, implementing global tax reforms like the Income Inclusion Rule and Domestic Top-up Tax.
Indonesia’s Ministry of Finance (MoF) has released Regulation No. 172 of 2023 (“PMK-172”), which prevails as a unified transfer pricing guideline. PMK-172 consolidates various transfer pricing matters that were previously covered under separate regulations, including the application of the arm’s length principle, transfer pricing documentation requirements, transfer pricing adjustments, Mutual Agreement Procedure (“MAP”), and Advance Pricing Agreements (“APA”).
The Indonesian Directorate General of Taxes (DGT) has continued to focus on compliance with the ex-ante principle, the expanded scope of transactions subject to the arm’s length principle, and the reinforcement of substance checks as part of the preliminary stage, indicating the DGT’s expectation of meticulous and well-supported transfer pricing analyses conducted by taxpayers.
In conclusion, PMK-172 reflects the Indonesian government’s commitment to addressing some of the most controversial transfer pricing issues and promoting clarity and certainty. While it brings new opportunities, it also presents challenges. Taxpayers are strongly advised to evaluate the implications of these new guidelines on their businesses in Indonesia to navigate this transformative regulatory landscape successfully.
In a significant move to bolster economic resilience and sustainability, Singapore’s Deputy Prime Minister and Minister for Finance, Mr. Lawrence Wong, unveiled the ambitious Singapore Budget 2024 on February 16, 2024. Amidst global economic fluctuations and a pressing climate crisis, the Budget strategically addresses the dual challenges of rising operational costs and the imperative for sustainable development, marking a pivotal step towards fortifying Singapore’s position as a competitive and green economy.
In anticipation of global tax reforms, Singapore’s proactive steps to implement the Income Inclusion Rule (IIR) and Domestic Top-up Tax (DTT) under the BEPS 2.0 framework demonstrate a forward-looking approach to ensure tax compliance and fairness. These measures reaffirm Singapore’s commitment to international tax standards while safeguarding its economic interests.
Transfer pricing highlights from the Singapore Budget 2024 include:
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.
Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.
China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.
The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.
In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.
Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
- China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
- Q1 2024 Brief on Transfer Pricing in Asia
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
- Is journalist Vicky Xu preparing to return to China?
- Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
- China Unveils Plan to Upgrade Industrial Equipment
